Rishab Verma and his company, Verma Holdings, LLC, agreed to settle charges filed by the Federal Trade Commission (FTC) that Verma sent millions of spam text messages to mobile users around the country, dishonestly promising them free merchandise.
The defendants were initially charged in a 2013 complaint with arranging for the transmission of unsolicited commercial electronic text messages offering free goods, including $1,000 gift cards to Target, Walmart and Best Buy, according to a Tuesday FTC release.
Verma and his company “used false promises of gift cards to draw consumers to websites that collected sensitive personal information,” according to the release. “The sites also required consumers to provide credit card information to sign up for trial offers.”
Judgment in the amount of $2,863,000 is entered in favor of the FTC, but that judgment is suspended due to Verma and his company being unable to pay more than $26,100, according to documents filed in U.S. District Court in the Southern District of Texas, Houston Division, on July 15.
The suspension of the judgment will be lifted if it is revealed that any defendant “failed to disclose any material asset, materially misstated the value of any asset, or made any other material misstatement or omission” of represented finances, according to the documents.
It is further ordered that the defendants are barred from other practices, including misrepresenting that a good or service is free and without obligation, implying that consumers have won a contest or a gift, and that personal information is required for misleading reasons.
The complaint against Verma and his company was one of eight filed in 2013 as part of an FTC crackdown on text message spammers dishonestly promising free gift cards, according to the release, which adds that the spammers sent out more than 180 million messages altogether.